Agenda item

School Forum members to receive and approve the Schools Revenue Funding 2022/23 Consultation document issued to schools and academies.

 

 

Schools Forum received a report which sought approval of the Schools Revenue Funding 2022/23 Consultation document, to be issued to schools and academies.

 

Sandwell had an ambition to ensure that all schools and academies in the borough were rated as Good or Better by Ofsted. To achieve this during times of austerity would require astute and prudent usage of finite, and reducing, resources.

 

There remained significant financial challenges in the education sector at present. It was clear that, despite recent funding announcements, proposed schools funding arrangements would not fully offset the effects over the last 10 years of inflation, the national pay wards, the apprenticeship levy and changes to employers pay contributions. Equally, schools would also have to source many services once provided free by the council.

 

Given that these factors had impacted, over time, detrimentally on local budgets, the decisions which had been taken by the current Schools Forum would need to consider how the factors contained within the schools budget formula delivered an equitable spread of resources to all schools, which targeted areas of need whilst protecting those that were most financially vulnerable.

 

Schools Forum would need to consider the impact of a “hard” National Funding Formula, if and when implemented, and the continued steps the borough should be required to take to move towards this, taking in to account minimum funding guarantees to allow schools time to prepare for, and manage, future changes in funding.

 

At the end of August 2019, the government had announced that funding for schools and high needs would increase by £2.6 billion for 2020/21, £4.8 billion for 2021/22, and £7.1 billion for 2022/23, compared to 2019/20.

 

The government had published provisional schools and high need funding allocations for 2022/23, which was the third year of the three-year funding increase (as illustrated in the table below).

 

 

 

Description	Schools Block	High Needs	Central Schools Services Block
	£	£	£
2022/23 – Provisional NFF Allocations	303,269,139	60,638,720	2,263,500
2021/22 – Initial Allocations December 2020	297,545,210	55,737,931	2,249,075
Increase	5,723,929	4,900,789	14,425
Note: The funding for both years are based on Pupil numbers in the October 2020 census of 55,511 pupils.

 

The Dedicated Schools Grant consisted of 4 blocks; schools, high needs, early years and the new central schools services block.   Each of the blocks of the (DSG) had been determined by a separate national funding formula (NFF).  The Early Years Block allocations would also be released at a later date.

 

Schools block funding was based on notional allocations for each school, which would be aggregated to arrive at the schools block funding for each local authority.

 

Local authorities would continue to have the responsibility to set a local formula to distribute the funding allocated to them, to schools in their area in 2022/23.

 

The government had stated in their consultation “Fair school funding for all: completing our reforms to the National Funding Formula” which has been issued on the 8th July 2021, with a closing date of 30th September 2021; that their intention since the introduction of the NFF had always been to move to a funding system in which all individual schools’ funding allocations would be set directly by the national formula without substantive further local adjustment.  The government had referred to this as the “hard” NFF.

 

The consultation was part 1 of a 2-stage consultation process.  It was expected that the Government would issue a response to the first stage in Autumn 2021.

 

The following items were a list of key changes to the schools NFF in 2022/23: -

•        The NFF factor values had been increased 3% to basic entitlement, free school meals at any time in the last 6 years (FSM6), income deprivation affecting children index (IDACI), lower prior attainment (LPA), English as an additional language (EAL) and the lump sum.

•        2% to the floor, the minimum per pupil levels and free school meals (FSM);

•        0% on the premises factors, except for PFI which had increased by RPIX.

•        Data on pupils who had been eligible for FSM6 was now taken from the October 2020 school census instead of the January 2020 census, to make the factor more up to date and bring it in line with arrangements for other NFF factors as well as the pupil premium.

•        In calculating low prior attainment proportions, data from the 2019 early years foundation stage profile (EYFSP) and key stage 2 (KS2) tests was used as a proxy for the 2020 tests, following the cancellation of assessment due to coronavirus (COVID-19).

•        Pupils who had joined a school between January 2020 and May 2020 attract funding for mobility based on their entry date, rather than by virtue of the May school census being their first census at the current school (the May 2020 census did not take place due to coronavirus (COVID-19)).

•        Further to the consultation on changes to the payment process of schools business rates, schools business rates would be paid by ESFA to billing authorities directly on behalf of all state funded schools from 2022 to 2023 onwards.

•        The minimum per-pupil levels would be set at £4,180 for primary schools and £5215 for KS3 and £5,715 for KS4. This meant a standard secondary school with 5-year groups would receive at least £5,415 per pupil. (These rates were a reflection of the TPG and TPECG being rolling into the NFF).

•        The funding floor would be set at 2.0%, which was broadly in line with the current inflation.

•        Schools would benefit from an increase of 4% to the formula’s core factors. Exceptions to this were that the free school meals factor, would be increased at inflation and premises funding would continue to be allocated at local authority level on the basis of actual spend in the 2019 to 2020 APT, with an RPIX increase for the PFI factor only.

•        Growth funding would be based on the same methodology as last year, and would also have the same transitional protection. There would be no capping or scaling of gains from the growth factor.

 

The key features of local authority formulae arrangements in 2022/23 were: -

 

•        The minimum per-pupil levels would be set at £4,265 for primary schools and £5,321 for KS3 and £5,831 for KS4. This meant a standard secondary school with 5-year groups receive at least £5,525 per pupil.

•        Local authorities would continue to be able to set a Minimum Funding Guarantee in local formulae, which must be between +0.5% and +2.0%.

•        Teachers’ pay grant (TPG) and Teachers pension employers contribution grant (TPECG) were now fully rolled in to the NFF; no separate adjustments were needed in the local formulae, beyond what had already been done in 2021/22 to account for these grants in 2022/23.

•        Following the cancellation of assessments in summer 2020 due to COVID-19, local authorities would use 2019 assessment data as a proxy for the 2020 reception and year 6 cohort, which would be reflected in the data received from the DfE.

•        Local authorities would continue to be able to transfer up to 0.5% of their schools block to other blocks of the DSG, with schools forum approval. As the TPG and TPECG were now fully incorporated into the NFF, unlike last year, no adjustment would need to be made from the total schools block to account for these grants when calculating the funding to be transferred. If the authority were to consider such a transfer it would equate to a maximum of £1.516m. A disapplication would be required for transfers above 0.5%, or for any amount without schools forum approval.

•        The authority would not be requesting a movement of funding from the Schools block to another DSG funding block, as it was recognised that the significant budget pressures schools had been facing in recent years and it did not anticipate a budget pressure on the High Needs block for 2022/23 given the increases in funding from the Government.

 

The central schools services block provided funding for local authorities to carry out central functions on behalf of maintained schools and academies.  The block comprised two distinct elements; one for ongoing responsibilities and a cash sum for historic commitments.

 

The DfE had undertaken an exercise a few years ago at a national level to re-baselines historic commitments.  This included: -

 

•        Schools Forum – classified as an ongoing responsibility,

•        Admissions Service – classified as an ongoing responsibility.

•        Pensions Administration – classified as an historic Commitment.

 

The DfE had cut historic commitment funding by 20% to £0.146m with the expectation that funding would continue to reduce and ultimately end over time; and, therefore, any commitment would also reduce and end over time.

 

The consultation on the formula funding for schools for 2022/23 included proposals on the following:

 

The funding formula to use for allocating schools budgets;

 

1.      Option 1 – Stepped change in the ratio - LA Formula (change in AWPU/MFG) with a ratio of 1:1.25 in year 1, 1:1.27 in year 2; and 1:1.29 in year 3. This will be the third year of the stepped change.

2.      Option 2 – Secondary Schools receive 1% more above the overall increase in funding.

3.      Option 3 – National Funding Formula Factor Values

 

•        Pupil Number Growth Contingency Fund; two options have been proposed for consideration:

 

•        Option 1 to continue with the current criteria of funding LA agreed PAN/Bulge class increases, new and growing schools and mid-year admissions; with a fund of £1.850m being proposed.

•        Option 2 to amend the criteria to fund PAN/Bulge class increases, new and growing schools, but cease funding of mid-year admissions. It is estimated this would require a fund of £1.300m.

 

•        De-delegation proposals; there are 5 de-delegated proposals to be considered by maintained schools.

•        Education Functions; there are 3 Education function proposals to be considered by maintained schools.

•        Minimum funding guarantee and capping of gains; this is to ensure the costs of providing the minimum funding guarantee protection are covered.

•        Central Schools Services Block; there are 4 proposals to be considered by all schools, maintained schools and academies.

 

This consultation was applicable for one year only (2022/23).

 

The draft Schools Funding 2022/23 Consultation document was attached to the report for review / information.  The deadline for stakeholders to respond was noon on Wednesday 1st December 2021.

 

R Kerr advised that she would be presenting to JEG on 11th November and to all Head Teachers on 15th November.  At JEG on 11th November, all lead officers would also be present to answer questions.

 

Forum Members discussed the report and the proposals contained therein.  In particular, Members requested the following information to be added to the consultation document, to enable schools to be in a position to make an informed decision: -

 

•        Risk / Impact assessment report to be included for the safeguarding and attendance aspect of the consultation.

•        Whether safeguarding and attendance could be split and if this was a viable proposal for schools to make as part of the consultation process. 

•        That the figures for both safeguarding and attendance / prosecution be provided where the two services were separated from one another to see how much was allocated to each.

•        That the option to split these two services, if deemed appropriate to do so, be retained as an option for the Forum to make.

•        Last year Primary Heads had queried why it wasn’t an option to maintain the status quo in terms of formula funding.  It was requested that the reasons why it wasn’t possible were provided so it was absolutely clear this year to avoid similar confusions.

 

Resolved that: -

 

1.             approval be granted for the Schools Funding 2022/23 Consultation document to be issued to schools and academies and other interested stakeholders, subject to the additional information requested above being addressed within the document.

 

2.             approval be granted for the submission of a disapplication request to the Education and Skills Agency for Bleakhouse Primary school to receive a second year of lump sum protection, which equates to £180,680.